Internal audit need and provisional plan 2001/02

Report: 5
Date: 8 February 2001
By: Director of Internal Audit

Summary

This report sets out the proposed plan for the use of Internal Audit resources from April 2001 to March 2002 inclusive. The plan is based on an updated Audit Needs Assessment (ANA) for the next five years ahead. From the ANA the required coverage of audits has been identified in risk priority order. The plan takes into account that which can be audited, allowing for likely staffing levels, the use of contractors and some contingency time.

A. Recommendation

The Audit Panel is asked to approve the provisional plan (subject to final confirmation at the next Audit Panel meeting.)

B. Supporting information

The plan will provide 86 per cent coverage of the identified need for systems audits. It is based on probable staffing levels plus a similar level of contractor time to that of the current year. This is an improvement on the planned 80 per cent coverage of systems audits originally approved by the previous Audit Committee for the current year. This improvement should be possible through more effective working and the impact of the reduced organisational size of the MPS under the MPA.

Our calculated overall audit need for the MPS (and allowing for some work at the MPA itself) for the next five years ahead at 15,990 days is about 1,000 days less than last year's calculation. This reflects the loss of overall audit responsibility for the Inner London Probation Service and the Inner London Magistrates Court Service as well as the streamlining of some future audit work with the reduction in Operational Command Units under the new Borough structure.

Appendix 1 sets out the identified audit need. Appendix 2 demonstrates how we intend to apply the plan for 2001/2002 and provides a reconciliation between the identified audit need and the plan. Appendix 3 lists those audits that will form new audit work in 2001/2002.

C. Financial implications

None at this stage. The plan is based on the proposed budget and expected staffing situation. Savings from the shortfall in staff will be absorbed by the cost of additional contractor work.

D. Review arrangements

Progress will be reviewed at the next Audit Panel and at each subsequent Audit Panel meeting during 2001/2002.

E. Background papers

None.

F. Contact details

The author of this report is Peter Tickner, Director Internal Audit.

For information contact:

MPA general: 020 7202 0202
Media enquiries: 020 7202 0217/18

Appendices

The following appendices are available as Adobe Acrobat PDF documents (see Supporting material).

• Appendix 1: (5Kb) Calculation of annual internal audit need
• Appendix 2: (6Kb) Audit Plan 2001/2002 based on probable staffing levels
• Appendix 3: (6Kb) Provisional Internal Audit Programme of New Work 2001/02

Explanatory Note for Appendices 1-3

The calculation in Appendix 1 reconciles the calculated annual Internal Audit need from the five year Audit Needs Assessment with the likely available resources, including contracted out audit services, during 2001/2002.

We have identified an annual need for 3,668 general internal audit days (including systems audit and computer audit work) and 1,845 forensic audit days (including investigations and preventative advice, as well as new work on the National Fraud Initiative of the Audit Commission). This gives a split of 67 per cent of the time on general internal audit work and 33 per cent on forensic audit work.

Appendix 2 represents our summary resource plan based on likely available staff and contractor support next year. This appendix also reconciles the plan to the identified need. We plan to do 3,299 days on general audit work and 1,463 days on forensic audit work. The split of activities is designed to be in line with the identified need. We have planned to cover 86 per cent of the total audit need.

Appendix 3 lists the new systems audits that we plan to undertake in 2001/2002.

Glossary of Terms Used in Appendices 1-3

Systems Development Work

Proactive internal audit support for new and developing MPS or MPA systems.

Managed Audit

Work designed to dovetail with the needs of District Audit that should ensure external audit fees are kept to a minimum while achieving a wide audit coverage.

Systems Audit

General audit or IS/IT audit work to enable the Director of Internal Audit to evaluate the adequacy and effectiveness of internal control within the MPS.

Forensic Audit

Work Investigations and preventative advice for the non-operational business activities and contractors of the MPA.

Control Advice

Ad hoc audit advice given at local management's request.

Contingency 

Theoretically we should allow 5-10 per cent contingency time for unplanned new work and additional time needed on planned work. In practice, we have allowed less than 5 per cent.

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